Yahoo Finance 'There's no playbook for this': This CEO cut employee salaries by 20% and implemented a 4-day workweek to avoid layoffs and save the company — here's what happened
See if you can follow this workplace math: 40 hours - 8 hours - 20% pay = 1.
Translation: For a Canadian purchasing software company, reducing an employee’s 40-hour work week by 8 hours, with a 20% pay cut, equaled one job saved.
That clever equation added up to another significant number: zero layoffs.
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Vancouver-based Procurify implemented the solution in the early days of the COVID-19 pandemic under the direction of co-founder and CEO Aman Mann. You could file the creative move under “walking the talk,” as the software company’s tagline is “intelligent spend management.”
"We built Procurify for the worst of times, not the best of times," Mann told Employee Benefit News. "Our philosophy has always been 'How do you help save jobs, protect your team and your company?'"
Solution feedback
It would be one thing if Mann, whose company dates to 2013, brought down the iron fist on his staff. Instead, he took the idea to employees to get their feedback before pulling the trigger.
“It was a pretty unanimous ‘yes’ across the board, except for one individual who couldn’t be a part of that who chose to exit,” Mann told CNBC.
Not that Mann wasn’t cautious in his optimism: “There’s no playbook for this.”
Whatever that lone worker’s reason for leaving, they might be looking on with regret today. It took Procurify roughly three months to get back on solid ground, after which the company’s budgets returned to normal — with everyone’s salary restored to 100%.
Read more: Retire richer — why people who work with a financial advisor retire with an extra $1.3 million
4-day workweek
But why stop there? Rather than return to a traditional five-day week, Procurify adopted the four-day workweek as permanent. Mann said he noticed how focused and energized the staff had become.
“The mindset of everyone just shifted,” he said. “It was such an amazing experience to see that and I decided, ‘Well, we’re not going back.’”
Mann is hardly alone in adopting a shortened workweek to make his staff happier and more productive. In fact, it’s a movement with roots that trace back to an organization called 4 Day Week Global.
The company is the brainchild of Andrew Barnes, a successful New Zealand entrepreneur who theorized back in 2017 that a shortened week would have a positive impact on employees and his organization.
Barnes implemented a trial and it was deemed an unqualified success. Soon after, Barnes and Charlotte Lockhart co-founded and 4 Day Week Global in 2019 set out to see if the results could be replicated, with employees receiving 100% pay for 80% time worked with 100% productivity targets achieved.
Many four-day workweek trials have been conducted worldwide with the aid of 4 Day Week Global, yielding positive results. The not-for-profit welcomes companies to give the idea a go.
In the end, benevolent bosses such as Mann reinforce enlightening if hard-won lessons stemming from the pandemic. It’s now conventional wisdom that employees prefer working at home or in a hybrid situation. A four-day workweek may not be far-fetched.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
